Hello and good evening. I’m going to get started in just another minute or two. I just want to make sure people have a chance to get logged in. I will be right with you. Thank you. Well, good evening everybody. Thank you so much for joining me tonight to talk about what baby boomers need to know about their retirement income, social security planning. So, this is one of our popular topics that we uh uh me and my my whole team that we present. I pro I do this once a quarter. So every three months or so I do this presentation and it’s a very popular one. So we will keep on doing these and hopefully um if you’re seeing this for the first time again thank you for joining me. Hopefully you’ve seen some of our other presentations that we have done as well. I do topics like Medicare uh retirement planning uh market updates. I do many different topics. Long-term care uh you know just annuities I just did not too long ago. So uh but yeah, various topics important for financial education. So it’s something that I do. My name is Joe Gaspari. I am one of the financial consultants here at Alliant. I’ve been with the credit union for almost about 13 years here doing uh investment related uh I’ve been licensed for doing this for a little over 20 years, about 22 actually. Uh so doing this for a good long time. uh talking about investments and putting people’s money to work and mostly planning uh a lot of retirement planning. At the end of this presentation, I’m hoping that you and I could have a conversation one- on-one. I’ll be putting up a survey at the end of the presentation to see if you would like to discuss this topic. And what that means is basically many times when I’m talking to someone, if they say, “Joe, here’s what I have. Here’s what I want. Am I on the right path for retirement? Here’s how much social security I’m going to be getting. Maybe there’s a pension. How much spending are you planning to do in retirement? And this social security presentation is a big part of this uh especially with that retirement plan. Is social security enough? Probably not uh to live on in retirement, but we can certainly put a whole plan together. Um, so I do have actually someone just threw up a question on here and let me get I think it’s right on the next screen here. Uh, so this uh so we are cannot record these presentations for compliance purposes. Uh, and also because other people have tried to record uh these that we can track uh we are not able to have these recorded or we are not able to record this presentation. um for further information. I’m hoping that you and I could have a one-on-one conversation or you can certainly look out for this presentation again, maybe from myself or one of my co-workers might be doing this. So, but unfortunately, yes, we are not able to record and uh distribute these presentations again for compliance purposes. So, what else do I have coming up? I’m going to be doing tax planning. This is a big one for uh that we do uh quite a bit as well and it’s not so much filing tax planning. This has to do with taxes in your retirement or moving forward of what types of accounts, traditional IRA, Roth IRA, um savings, just regular brokerage accounts. How are things taxed? Some might be taxed now, some might be taxed later, and some things are taxed never like life insurance proceeds as an example, Roth IRA distributions. So, there’s many things like that and digging into what taxes mean to you in your retirement. And then with retirement, the seven things to do before you retire, another popular presentation that I do. So, uh, hope you hopefully you’ll see, um, I’ll see you on some of these presentations coming up. You do have access also to, uh, webinars, uh, to see what other topics are available. If you want to grab your camera and take a screenshot of this, uh, so you can have the websites, uh, at your fingertips. Then, um, Invest have a podcast you could listen to and check out our Aerys website and blog. and Aerys meaning Alliant Retirement and Investment Services. So, um you can see uh who we are, what we do, what types of products and services we offer. I can let you know that we do offer and I do offer full financial services from advisory accounts to some things that may have no fees if you’re just looking for guaranteed interest rates maybe better than what CDs can offer. uh many different things if you want to be ultra-conservative, ultraaggressive, or most likely somewhere in between there. Um there I certainly do offer that. But tonight, let’s dig into social security planning. So, we’ll dig into that. People are hurting their retirements by making terrible, costly decisions about social security. Uh things to know, uh you have many claiming options. decisions have far-reaching consequences. If you’re going to take it early, uh as early as you possibly can, then um it’s certainly something you’ll take a reduction in that payment. We’re going to talk all about this. Or if you wait as long as you possibly can, you’re going to get the highest paycheck, but of course for a shorter term, for shorter period of time. Uh choice impacts both spouses. Uh system is not bankrupt, not a Ponzi scheme. benefits are likely to um uh helped a family member and your friends aren’t the experts. One of the things I hear many times is if you were talking to a friend, a neighbor, a relative or someone that might be in the similar age group as you, but uh maybe they decided to take social security early and you might say, “Ah, that was a smart person. Maybe I should take it early.” Um they seem to know what they’re doing. Um or they took it later. Maybe I should take it later. uh what is your situation? This is not a cookie cutter where everybody should do the same thing. Some people might be forced to take theirs early at a reduced amount and some people can afford to wait and take a bigger paycheck later and depending on when you’re would like to retire, what’s your health status and what’s the best for your specific situation. And that retirement plan that I’m going to keep talking about a few many times throughout this presentation is going to help you decide that, you know, based on your specific situation. When I look at how much spending you want to do in retirement, what assets that you have, what other income do you have, including social security, and that will help us determine when you should take it. And if you took it earlier or if you took it later, the plan that we do and we do not charge for this plan. This is a complimentary service that we offer. So, it’s certainly something that I would encourage you to do is say yes at the end of this presentation on that survey. And it is a no cost uh no obligation uh consultation that we could do. And it is a very comprehensive retirement plan. you’d be pretty amazed on what’s uh what information you might get out of that. Uh I will mention also that uh you do have access to the chat box and the Q&A box, the question and answer box. If you do have a question throughout the presentation, ask away. Type it in either one of those, the chat box or the Q&A. And uh if you think of a question, go ahead and type it in. I’ll be taking all of those questions at the end of the presentation.
So, will Social Security be there for you? How much can you expect to receive? When should you apply for Social Security? And how do you maximize that benefit? And will Social Security be enough to live on in retirement? So, understanding the value of Social Security first, will it be there for you? Here’s a little bit of uh dollars of uh you be might be shocked if you haven’t seen these numbers before, but we have um basically 6.2% 2% of everybody’s paycheck. If you have a job and you’re getting your, you know, your um social security and taxes taken out of there, um 6.2% of your paycheck goes into social security. And if you are working for a company, your company matches that 6.2. So 12.4% of your income. If you happen to be self-employed, you could be paying all 12.4% 4% of that goes into this trust fund and all that money piles up and then money goes in, money goes out. Uh if we looked at, you know, quite a few years ago, there was a lot more money coming in than there is going out. But look now, so I’m going to look in at the very top there, trust fund balance as at the end of 2024, $2.721 trillion. And at the bottom, the trust fund balance at the end of the year is 2.561 trillion. So that balance is lower at the end of 25 than it was at the end of 2024. And we could see that total income in the box there of 2025. $1.449 trillion coming in. You would think that would be a lot of money, but it’s not enough. We have 1.609 609 trillion going um uh going out. So there’s more going out than there is coming in and about $160 billion difference. So big difference of uh when we see that trust fund balance ticking down. Now here’s a little chart to show this. And you see the blue line is the money coming in. That’s out of our paychecks. That’s all the workers and uh everybody 6.2% of their income. The orange line, if you look at the very far left of that, it was lower than the blue line, which means more money was coming in than there was going out. And then at the end, look at it’s a kind of weird that that jumps up in 2008 2009. A lot of unemployment going on at that point. The financial crisis was going on there and a lot of stuff was happening. So uh uh a lot of people retired started their social security during that financial or after that financial crisis time it jumps up and now it’s even going to be increasing. Baby boomers are retiring more than people are coming into the workforce. So we now we have in that 2010 to 2020 where that orange line is higher more money going out than there is coming in. And now then we look at in 2034 2035 range, we’re looking that this might run out. That balance might go to zero. That doesn’t mean social security is going to stop. But if nothing is done in 2034, you could see at the middle box at the bottom there, 2034 where it says 81% basically little over 80% of benefits will be covered by income coming in from all the workers projected at that time starting in 2034. Um, and but will there be a 20-ish% uh deduction in payments? That’s certainly a possibility. So, uh, um, unless something is done and we’re going to look at what are some of the fixites for this. So, we’ve been seeing that more money going out than there is coming in. And as long as there’s people working, there will be uh that tax taken out and it will be funding. But again, starting in 2034, there could be a potential reduction. So, here’s some of the fixit that could uh that could happen. Right now, if you make um up to 184,500, 6.2% of your income goes to social security. If you make anything above that, so let’s say you make 200,000. So we’re talking 15,500 that is not taxed. So you stop paying into social security if you exceed that 184500. Will they eliminate that? Will they be uh will they raise it to maybe 250 or 500 or a million or whatever they might do? Will they change that uh currently and that creeps up every year that number goes up? Just about 2 years ago it was about a 164 164,000. Will they raise a normal retirement age? Currently it’s age 67 for those born 1960 or later. There was talk maybe or should we make it 68 uh or 69 or even uh 70 to get the full retirement amount. Will they lower benefits for future retirees? Will they reduce the cost of living? Currently, there’s an average of about a 2ish% cost of living increase each year. Now, over the last 5 years, there’s been more than that. When we look at 2023 after the big uh inflation year of 2022, inflation skyrocketed that next year in 2023, we saw an 8.9 or 8.7% increase in social security. Uh everyone got that was a massive increase, but considering the inflation we were going through, it kind of matched that with prices increasing. And then there was a 5.9 the next year. Then there was a 3.2 two the next year. Now, these are, of course, now we’re back into the twos again and we’ll see what happens next year with wherever inflation ends up this year. Usually October, early November, they will announce what the increase will be for that next year. Uh, but if I go back the last 25 years or so, back to about two 2000, it’s about a 2% annual increase. Will they take that away or reduce it or will they revamp that somehow? So, we don’t know what’s going to happen in the future. It seems like every election cycle we talk about social security kind of on the table, but it doesn’t ever seem like much gets done with it. So, the bottom line for baby boomers, if you’re already on income right now on social security, most likely not going to be affected, but what’s going to happen with some of the younger folks? So, what’s a clearer way to think about social security? It is an inflation protected income. you paid out of your paycheck uh for all these years. So, you want to be smart about how and when you collect. So, how much could you expect to receive? Um we’ll certainly talk about how your number will be calculated. But social sec social security um offers income you can’t outlive if your monthly benefit is 2,000 today. As we talk about these inflation adjustments, you could see at the bottom where it says assumes a 2% annual cost of living adjustment. If you’re getting 2,000 a month today, right now, $2,000 a month in 10 years, you’ll be getting with two 2% average increases 262,000 plus uh in total income. 20 years on social security is 583,000. 30 years or more, you can be talking very close to that million that you could be taking out of social security. All depends. I don’t know what what our expiration uh each of us individually how long we’re going to be here, but it’s certainly uh something that if you can get a gauge of if you’re 67 and you take it and if you pass away at 77 that’s 10 years or 87 and 20 years when people are living longer. But uh you know again what is your plan? Uh if your benefit is 2,000 today and you do get these 2% average cost of living increases, in 10 years that 2,000 will be a little over 2400. And in 20 years it’s almost 3,000 a month with those 2% annual increases. And in 30 years a little over 3,600.
How much can you expect to receive? depends on your working career, how much you’ve earned over these years, and the age that you start taking it. So, at age 62, your earnings are uh are calculated, and it’s your highest 35 years of working. Your uh average index monthly earnings uh is what that aime is. Uh so, highest 35 years. So, if you started working at age 16 and let’s say you’re 66 and you have 50 years of working and uh it’s your highest 35. So, if you’re 16, 17, 18, you’re going through maybe school still, maybe in college, and you’re working part-time, uh those lower numbers probably will be falling off as you work more and more years. So, it’s your highest 35. It’s not the last 35. It’s not the first 35. It’s the highest 35 years. And if you are earning higher income now, every year you earn a higher income, a lower number falls off and your average increases. And your final number is calculated at age 62. I could say it won’t go down after that, but it could potentially go up if you continue to work and your average uh keeps increasing, but your number is calculated at that age 62. Um and it could be be increasing over the years with the cost of living adjustments. This is a calculation on here. But basically what this screen why uh it just shows if you worked the maximum and you put in the maximum into your so into social security every year of your working years. The highest that you could earn right now is $4,216.90 a month. So that’s, you know, if you maxed out, if you uh had very good income, maybe you’re going to be in the 36, 38, 3,900 uh range. And if you just maybe average income or lower income or took many years off, maybe raising children, maybe you’re at the 2,2, you know, 22500, but it all depends on how much you’ve earned over the years and again how many years uh and uh what uh age that you do start taking it. So, good to know, but why shouldn’t I claim it as early as age 62 instead of delaying for full retirement age or even age 70? So, if you take it early, your monthly benefit will be reduced. Uh, it also be reduced for taxes, potential taxes. We’re going to talk about how that all works. and Medicare premiums. Medicare, if you are on social security and Medicare, your Medicare payment comes out of your Social Security payment. Uh it’s an automatic that does happen if you are on Medicare, but you are delaying Social Security. Let’s say you start Medicare at age 65 and you don’t take Social Security till 67 or maybe even wait till age 70, you have to send in payments then. And currently Medicare is at I believe it’s 20290 $22.90 for Medicare that comes out and that increases pretty much every year. Uh when should you apply for benefits? Uh I’ll talk a little bit about my dad’s situation for example when we talk about health status, life expectancy and need for income whether or not you plan to work and survivor needs. Uh so my parents situation my dad uh his I think his first heart attack was at age 49. He had a bypass at 51. He had heart attack heart attack heart attack and another bypass at 64. He passed away at age 75. But when he turned 62 he did start his social security early. Kind of a health decision to retire or he did work a part-time thing. He was actually a deacon for the Catholic Church and uh he did uh you know get some part-time income for that but uh um he had to be limited because he did take a social security early. He had to limit what income he could receive but uh he ended up passing away at age 75. Financially it was still a decent decision. Um the easy number if someone said well should I take it early or should I wait? what if I live, you know, a shorter lifespan or what if I live a much longer life? And that age 78 to 80 range is kind of that break even. So if you’re saying, should I take it as early as 62 or should I wait till let’s say 67? Uh what you know what’s going to win? If you live past let’s say age 80, I’m going to say wait to take it. If you say I’m not going to be here until that late, I’m going to I might pass away earlier. So, I’m going to say then maybe you could take it earlier. But of course, we don’t know the expiration date. If we had our birth certificates had an expiration date on them, we can maybe know that and then I could tell you exactly when to take it. I can certainly do some calculations and figure that out. But we just have to put our best educated guess and I could tell you when I do the complimentary retirement plan. If you want to take it earlier or if you want to take it later, I plug in different scenarios. take it at 62 or wait till 67 or maybe even take it at 70. I can run those three different scenarios to see if you took a lower income but you had five more years of income or if you took the higher income at 67 and but that’s less years that you’re taking it or even 70 at a much higher income and even less years where’s that break even now when I do the plan at least it’ll give you a guide to say well whatever I choose if I take it at 62 or 67 or even wait till age 7D. I could show you in the plan that if it does work either way, all three scenarios might be, yep, you can do that if you want to. Then we can make a good educated decision on when you should take it. But at least you will know by doing this plan of at least I know that if I want to take it or maybe a health reason you have to take it earlier, I would be very comfortable in saying, “Yep, all three scenarios. Now, let’s kind of figure out what you want to do. At least we know you can do whatever you wanted to as long as all three of those scenarios do work when we do that plan. Will Social Security be enough to live on in retirement? Again, uh probably not. Um, you know, let’s look at the full retirement ages. So, right now, we’re pretty much done. Everyone aged 1943 or 54 that was at 66, they’re already well beyond that right now. And right now we’re getting into that 1959 age group. Later this year, if even you were born December of 1959, uh your social security, your full is is 66 and 10 months would be this coming October. So right now we’re talking mostly that age 67 and beyond is people that are not on it yet. And uh um so to take it as early as 62 would be that 1964 or later uh would be people that would be take making that decision. So depending when your birth year is uh if you and I are going to work up a plan for you and we can figure out is it even worth taking it at 62 let’s figure it out is uh but the answer might be let’s wait a little bit. If you have longevity in your family, we can help you uh really put pencil to the paper and not just guess when you should take it. Uh what if you apply for benefits early? So, we’re going to concentrate on the right column here. So, you could see at age 62, 63, all the way through 67. That’s age 67 in this example is 100% of your your full benefit. You get it all. And if you take it a year earlier, you’re getting about 6.7% taken off. If you take it 65, 64, 63, 62, you’re losing 30% of your benefit if you take it as early as 62. So 67 you’re full to 62 would be 30% taken off. And once you start that, you’re that’s for life that you are taking a lower number. Now, you’ll still get those potential average of to 2% cost of living increases, but those cost of living increases will be on that lower amount. So, I’m going to throw a reminder again that if you do have any questions, if you something you think of, uh, go ahead and type it in the chat or the Q&A box and I will get to those at the end of the presentation. What if you wait until after your full retirement age? And so, if you are uh let’s look at the right side again. Uh if you want to look at the middle, if you’re in that uh age 6 uh born 1958 59 range, um actually many people can be looking at this, but right now if you are age 66 uh full retirement age, you get four potential increases of 67, 68, 69, and 70. You can get 32% increase in your social security by waiting until age 70. If your full retirement age is 67 then it’s you get three increases so 124% so 24% more if you wait until age 70 so that is that you know reason of why would I want to wait that long if you do have longevity the plan will certainly show that if you do live till 80 85 90 95 plus um it’s going to be well worth it you’ll see a big difference in uh that paycheck and how much you’re going to be receiving by getting a 32 or 24% increase in your social security for that 20 plus years. Uh how to estimate your social security. I’ll give you the easy ssa.gov. So that’s the bottom one where it says ssa.gov planners bene you know b um um benefit calculators and but ssa.gov gov will get you to the main site where you can navigate and if you have not created a profile. You will create a profile. It goes through those kind of those credit report questions where it says which of the following cars have you owned in the past? Which address is associated with you? And it might have an address from 20 years ago. But uh you have to go through that list of questions verifying who you are and then you create your account and you can see your numbers and it’s a very intuitive site that if your full retirement age is 67 and you see you get 3500 a month and if you took it at 68 it’ll tell you that number. If you take it at 66 it’ll tell you that number. 65 64 or you could even say what if you took it at 67 and 6 months uh 6 months later you’ll get a little bit more. it’s recalculated monthly uh on this, but ssa.gov will get you to that uh to setting that up. And I do get alerts. In fact, I think my latest alert was within the last month. So, after I file taxes, um I had to pay a little bit. So, I toed mine probably April 13th or so. uh just a couple of days before the the 15th and uh so filed and I just got an email probably within the last you know 30 days from social security saying your new numbers are calculated you know view them now uh so you do get alerts or reminders every year to see your updated numbers so why delay benefits when we look at dollar amounts so let’s look at um you know so this again I’m going to go on the left side here, age 67, go down to 67 and go across where it says 100%. That is, so this is an age 67 person that we’re talking about. Uh, and the full monthly benefit for this specific person is 3,000 a month. And, uh, with cost of living increases, we’re going to get to that right column in just a moment, but so we’re talking about a 67 uh, is the full benefit uh, age for this person getting 3,000 a month. If that person decides and says, “I want to take mine at age 62,” that person will get 2100 a month. And 2100 a month, you could see the numbers all the 63 all the way up to age 70. So if that 3,000 a month person wants to defer until age 70, they will start income at 3720 a month. So big difference from 2100 the soonest you could take it to 3,700 the latest you could take it. That’s a it’s a 1,600 a month compound 2% annual increases for let’s say 20 years. Uh big difference in income over time. So why delay benefits? Again uh more income later on. So let’s say the person started income if claim at 62. So we’re going to look at that column right now. And if that person, that 3,000 a month person, um, they took it at 62, again, remember that was 2100 a month, but with a 2% cost of living increases, that income would be projected to be 2,460 by that time, by the time that person reaches age 70. by the time 75, 80, 85, all the way up to 100. I’ll even go with the 100 number for this example. But if you live to 100, you’d be that person would be getting 4,457 a month. If that person waited till age 67 to get the 3,000 a month, by the time that person is 70, 2% cost of living increases. Uh then we’re talking 3500 a month at age 70. And look at age 100 6,300. We’re talking almost 2,000 about 1,900 more uh a month uh by waiting uh for that uh at that age 100. Again, how many of us are going to live to age 100? But this is just I’m showing you the extreme example here. So if that person waited till age 70, he took the maximum income at age 70 4359 and then by the time that person is 10078.95. So age 62 age 100 4457 to 70 uh78.95. We’re talking a big difference. So again the longevity means a whole lot there. Again, I don’t know if your life expectancy is going to be 65, 70, 75, 90, 100, 100 plus. Who knows uh what specifically will be, but again, just knowing these income differences might make a difference in your retirement plan, especially depending on how much you would like to spend in retirement. How do you maximize your benefit? Uh examine your records and uh making sure everything is accurate. Log into the website. You can actually see every year you file taxes. Mine it goes back to my age 16 and I made probably $1,500 maybe that first year. Um, and then it’s going on and on and through all the years of increasing income over time. And uh, but you could see every year you file taxes and certainly see if anything is missing or incorrect. Applying for social security at the optimal time. your uh consider your income needs both now and in the future, your life expectancy and if you are married filing joint, your spouse’s life expectancy, too. So, we’re going to look at an example or two about that as well. So, taxation of benefits. So, the first one that we’re looking at here is if you decide to take your social security before your full retirement age early. So if your full retirement age is 67, then if you took it at 66, 65 all the way down to 62, if you take it early at all and you are getting that income, if you decide to work, you can’t make more than $24,480 a year without this $1 of every two. And what that means is that if you make more than that, every $2 you earn, $1 goes back into social security. Uh so, um it’s certainly you want to be very cautious of uh how much income you’re getting, you’re earning if you decide to take social security early. Some people will say, “I need it. I need the social security income and I need my job income.” I know it’s all going to kind of correct. You could see the benefit will be adjusted at your full retirement age. So, you’re putting money back into social security. You don’t get a lump sum back when you’re hit your full retirement age, but you do get um like a prrated increase in income for that, but not until your full retirement age. So, again, don’t let the earnings test discourage you from working. Sometimes you have to do what you have to do. And to avoid the earnings test, wait until full retirement age or later. If you do take your social security at your full retirement age or later. There is no $1 of every two going back. You can work. You can make as much as you want. It doesn’t matter. There’s no penaltyish. I’ll use the word penalty for that. It’s only if you retake your social security early and continue to work. Taxation of benefits. So this is how are you taxed on social security. You don’t have to have a lot of income for your social security to be taxed. You could see that if you are married filing joint if under 32,000 then you do not pay social security uh or taxes on your social security. If you make between 32 and 44,000 up to 50% of your social security can be taxed. Over 44,000 up to 85 of it is taxed. But I can tell you the nice way to say it, 15% of your social security will not be taxed. So, but up to 85% of it can be. And you could see the income for a single filer. It’s not much lower than that. And uh um again, married filing separate, there’s uh you’re paying tax uh on it. If you are married filing separate, you’re paying 85% of it. It will be taxed. Now, there’s we got this thing going on right now and I’ll use the term the big beautiful bill that was uh passed earlier um well last year when we talked about uh what uh you know the the no tax on social security didn’t really go through the way it was anticipated, but they did this $6,000 credit or deduction in addition to standard deduction or other itemized deductions that if your income is below a certain level, it’s below $75,000 000 if you are single or 150,000 married filing joint. If your income modified adjusted gross income is below that, you get an additional 6,000 credit or deduction for uh um if you are 65 or older and you can uh typically it wipes out the taxes you would pay on social security if you do get that full deduction. then there’s some phase out and then if you make a higher income you might not get that uh additional deduction. So that goes through 2028. So who knows what’s going to happen. Are they going to extend it after that? I’m sure who was ever in the administration at that point. We’ll see where we go at 2029 and beyond. But uh you know we’ll see through 2028 if you’re under those income limits enjoy some uh additional deductions to wipe out taxes on your social security. Uh ways to minimize taxes on social security is reduce other income of course. So if you’re not working uh you you know so it’s certainly something you’re putting yourself in a lower bracket. Uh anticipate IRA required minimum distributions RMDs. This is very important especially if you are not withdrawing from your retirement accounts prior to age 73 or age 75 if you are born 1960 or later. So I’ll just say age 73 for this example. If you are let’s say you’re 66 right now and you’re you want to defer taking any withdrawals from your uh your 401ks. If you happen to have some sizable balances in 401k or traditional IAS and you’re going to be mandated to take the required distributions, I’ll use an example of a million retirement account. A million-doll traditional IRA, you have to take out in the range of about 38,000 um from your IRA. Little it’s actually just a hair under 3.8%. So when you’re 73, so you might say, man, if I have a $2 million IRA, that’s over 70,000 that you have to take out. So if you are blessed with big balances on those, part of the retirement plan that I will offer, we’ll talk about taking either withdrawals or converting to a Roth IRA prior to those required distributions. And so we could start to spend those down a little bit so you don’t have such big required distributions at age 73. Big thing that I do with a lot of people, especially toward the end of the year when we figure out where your income is for the year and how much you uh you you know would like to maybe convert from a traditional to a Roth staying within certain tax brackets. Some might say I don’t want to exceed the 12% bracket or the 22% bracket. Uh but it’s certainly something that you and I can look at. Again, it’s a complimentary thing that we do. The full-on retirement plan with Roth conversions may be in there prior to uh your required distributions. So that’s that convert to a uh IRA to a Roth. Delaying social security to reduce the number of years. So if you’re looking at I don’t want to pay tax on social security. I’m 66 or 67. maybe wait until 68, 69 or 70 if you can afford to. And that’s part of the plan, too. What if you did spend more of your own assets at age 67, 68, 69, and then took a bigger paycheck for social security at 70? Can will the plan support that? And it certainly is something that this plan will certainly do. It will tell you that yeah, you can afford to live off of your own assets for these years based on the spending you would like to do and then take a bigger check later, then you’re spending less of your assets once you do start that bigger social security income. Reducing expenses or pay down debt uh and adopt a simpler lifestyle. That one might be a little easier said than done. Uh but it’s certainly something to consider there. Continue to manage taxes throughout retirement. um Medicare. So, here’s that 20290 that I mentioned earlier for Medicare that uh comes out of Social Security and looking at to assume a 2600 primary insurance amount PIA at age 67. We look at what that percentage is. So, if you’re at if you take it at age 62 and you’re getting a lower paycheck, that 2290 is a bigger percentage of that lower paycheck, but it’s a much smaller percentage the longer you wait and the bigger that paycheck is. Uh, that 20290 is a smaller percentage. So, but just know that 20290 does come out of your social security check or payment. Um, when to apply for social security? If you apply early, your benefits start lower and they stay lower for life. Uh cost of living adjustments, colas, magnify the impact of early or delayed claiming. And again, a a 2% average cost of living increase on a lower number or a higher number. Again, those compounding makes a big difference over time. Your benefit may be taxed and or reduced to cover Medicare premiums. Don’t let that earnings test, again, if you have to file early, start social security early, and you’re still working more than that 24,000, uh, you have to do certainly you have to do what you have to do. Like I said, uh, and delaying benefits may give surviving spouse more income. So again, we’re going to talk about spousal benefits coming up here in a moment. I’m not going to live so long, so why shouldn’t I just claim my benefit when I can? For couples, you should always maximize the higher earnings benefit to protect the sur protect the surviving spouse. Here’s an example of how social security works with a higher income earnner and a lower income earner. So, let’s say John has a primary insurance amount. Again, his age 67 I’ll use uh is 2,000 a month and Jane had a lower income, maybe a lot less years working or just part-time work. Uh but her her benefit on here her full retirement benefit is is 800 a month. So if Jane applies at her full retirement age her benefit will be a th000 not the 800 because she is guaranteed to get 50% of John’s at least. So she could take her own. If her she was getting 1,200 she would take her 1,200. But because it’s lower than J’s 50%, she can not take the 800, take a thousand because the law says that she can take 50% of John’s, assuming John um you know waits his full retirement age, too. So the primary worker must have filed for benefits for her to get that 50%. He has to file for her to get that. The spouse must be at least 62. But if she she can get that spousal benefit, but it will be the 50% minus an age adjustment. So it won’t be the full 50% because in this case, if someone took it at age 62, it would be reduced because she decided to take it earlier. There’s no delayed credits for on spousal benefits. So, if John waited until age 70 to take it um at a higher than 2,000, she would only get that based on that uh that full retirement age, that 2,000. So, 1,000 would be her benefit. She doesn’t get increases by waiting until 68, 69, or 70. Well, I’m already widowed or divorced, so how does that impact the Social Security? If you are widowed or divorced, divorced, you might be eligible for survivor benefits, divorced spouse, survivor benefits or uh divorced spouse benefits that can increase your monthly check. So, uh we’ll come up with a we’ll see a couple of examples coming up here. So, survivor benefit will depend on the age the deceased person started claiming. So if the deceased person started their social security before his or her full retirement age, the survivor benefit will be limited to the higher of the deceased spouse or the uh deceased spouse’s benefit or 82% of his primary insurance amount. If deceased claimed after the survivor benefit will include delayed credits. So that this one as a survivor that you could get that 68, 69 or 70 higher benefit.
So if the spouse dies while both are receiving benefits, the wid widower uh widow or widowerower may switch to the higher benefit. So here’s an example. Joe and Julie are married. Both are over full retirement age. Joe’s benefit is 3600. Julie’s benefit is 1,800. If Joe dies, Julie notifies Social Security and her 1,800 benefit is replaced by the 3600. She gets the better of the two. So in this case, if Julie passed away, the 1,800 would go away and Joe would just keep his 3600. But in this case, saying Joe passed away, she gets the 3600, but the 1,800 goes away. So either one if one of them passes away that the bigger benefit remains but the lower one will go away. So that’s something in planning purposes is when two people are still alive and you’re getting you know a much higher income because both of you are getting it if one of you passes away the low even though it’s the lower benefit one social security benefit goes away. So again, another reminder as we start to get toward the end of the presentation here, uh questions, if you do have any, fire away and type them in at any time. Uh and they will save to into the presentation. I know we have some already, but uh if you do have a question, go ahead and type it in there. Uh so Joe and Julie are married and uh Joe’s is 3600. Joe delays claiming until age 70 his benefit. Now that 3600 would be 4464. So in this case, Joe’s instead of taking it at 66 or 67, uh, he waits age 70. And this is so his new benefit is now 4464. If Joe dies, Julie’s survivor benefit would be the 4464, not the 3600. She gets those age increases. by him waiting till 70, he passes a higher paycheck uh to his surviving spouse. So that’s one of the reasons even though Joe might say, “Well, I’m not going to live long. Why don’t I just take it as early as possible?” In this case, it helped the survivor couple must have been married at least 9 months uh at the date of death. Uh and survivor must be at least 60 for reduced benefit. So if a survivor is 60 and gets that uh that survivor benefit because it’s not under the full retirement age, you can take it legally at or as early as age 60, but it will be a reduced amount. Survivor benefit is not available if the widower or widow or widowerower remarries before age 60 unless that marriage ends. So if that person did get remarried but it it end up divorce or deceased uh um other spouse again then uh it could happen but if that person is married then that widowerower uh benefit is not available. Divorced spouse survivor benefit. So even a divorced spouse the survivor benefit will be but they would have to be married for at least 10 years. Same as spousal benefits. Uh so divorce spouse benefit married for 10 years. So you now we’re talking two living people uh but but divorced the marriage had to be at least 10 years. The person receiving divorce spouse benefit is currently unmarried. She can’t get remarried. Uh the expouse is at least age 62 and if divorce was more than 2 years ago the expouse does not need to have filed for benefits. So that means so let’s say Mister is the higher income earnner in this case and they get divorced and Mrs. now is uh is let’s say 62 and she wants to take a spousal benefit. If they if there they’ve been divorced at least 2 years but they were married for at least 10 then he does not have to file for her to get that sp that exspousal benefit. So that certainly can uh um could be in play. More than one expouse can receive benefits from the same worker. Benefits paid to one expouse do not affect the worker or other current spouse or expouses. Uh divorce spouse uh benefits stop upon remarage of spouse collecting benefits. Uh so I’m going to tell a little uh goofy little story that I say at the end of this presentation every time that I heard actually when I went to a social security from someone from social security went to a webinar I don’t know 15 to 20 years ago somewhere in that range a long time ago but I heard this and I’ll share that with you in just a moment. So this is really more comp complicated than I realize. Would it be better if you took it early? Should you delay? Again, the complimentary retirement plan will help us determine that. Will you pay a penalty or get a bonus? People are hurting their retirements by making terrible costly decisions about Social Security. And Social Security offers an inflation protected income. Your monthly benefit will be be reduced if you take it early. Couples should always maximize the higher earners benefit for the surviving spouse. And if you’re widowed or divorced, you may be eligible for benefits. Uh so again, I hope you and I will have a conversation about your specific situation and uh considering if you do have pension, if you have IAS, 401ks, Roth IAS, required distributions, how does all this stuff work in your plan? The retirement plan that I’m talking about takes every single thing here into account of what spending you’re doing from various types of accounts that you have. And I would get the whole list of whatever you assets that you do have. What’s that order of operations for withdrawals? Should you take savings out first? Should you take traditional IRA out first? Should you take tax-free Roth IRA out first? And then we can certainly talk about the order of operations as well. So, Social Security can certainly estimate how much you’re going to be receiving, uh, but they won’t project and they won’t do a plan for you as far as tell you what to do or how to do it or what does this mean for all of your other stuff. Uh, you can certainly get numbers from them, but please use us here. It’s a complimentary thing that we do to help you figure out when you should be taking Social Security. So, when should you apply? What if you want to keep working? What if you’ve already applied? How much will your benefit be? Can you coordinate the spousal benefits? What’s the best long-term strategy? And what do you do next? Say yes to the survey and you and I can certainly have that conversation. So, very quickly, I’m going to say this little story and then I’ll get to some of the questions at the end here. Uh but basically when we talk about the surviving like spousal and expousal benefits and things like that, the story this person said was let’s assume a 25year-old man uh gets married and she is 25. Every person on here they’re all the same age. So let’s say he gets married, he’s 25, marries a 25year-old and 10 years later they get divorced. let’s say 10 years in one day just to say that they were married that 10 years that she needs uh they need to be. So they get divorced at age 35 and he immediately gets remarried at 35 and that ends at age 45. So married for 10 years again. So we have two expouses now and he gets remarried at 45 and gets divorced at 55. So now we have three expouses. He gets remarried at 55 and now let’s say they are 66. Let’s say they were at this full retirement age. So he’s got three expouses and one current spouse. Let’s say he’s getting ready to get his social security and he qualifies for a $3,000 a month benefit. Now the expouses, expouse number one, 2, and three, they were all married for at least 10 years. So they get the spousal benefit which is 50%. 1,500 1,500 1,500 for the three ex spouses and then current spouse gets 1,500. So, let’s assume that none of these uh the the three ex’s and the current spouse worked. They let’s say they never worked a day in their lives and they didn’t contribute to social security, but the law allows them to take one person gets 3,000 a month and then 1,500,500,500 for the ex’s 1,500 for the current spouse all on one worker. Kind of one of those kind of wow wonder why social security is kind of so messed up here. But, uh, just a goofy little story just, uh, to to show that, yeah, there’s a lot of different things that could happen with Social Security. But, uh, so with that, uh, my information is up on the screen here. I’m going to put up the survey in just a second. I’m going to take some questions and but you also see a QR code. If you happen to have your phone handy and you do want to set up a time, you can actually put your camera on that. you’ll click on the little yellow thing that comes up and you’ll get to my calendar and you could schedule appointment if you want to do that right the second or certainly uh if you say yes on the uh survey here then I will be reaching out scheduling a time for you and I to meet. So with that I’m going to put that survey up here right now. So, you’ll see that hopefully you see that up on your screen right about now. And uh so, please respond to that while I’m going through the questions. And hopefully you and I will have a one-on-one conversation. So, let’s go through um let’s go back to Joe. Are all the the services free? So, um services free. So, basically everything that I do, uh, whether it’s just a consultation and you want to just talk about, here Joe, who are you? What do you do? What do you offer? Um, if you want to do the full retirement plan, not a dime. We do not charge anything for any of that. We do even have some investments that don’t cost a dime. We do advisory accounts though. That might be the percentage of an you know like I’ll use that 1% that many you know Schwab Meil Lynch all these big companies that do advisory accounts do where you might pay a 1% advisory fee based on the amount of assets you invest. There are certainly accounts that like that that we do. So it’s not everything is is free but to figure everything out we’re not going to charge you a dime. If we do some investments after that, we can certainly talk about some fee structures on some of the things, but not everything does have a fee. Some things don’t have any fees at all. Uh with the talk of uh cutting benefits to save for social security, do you see uh some clients claiming early in the hope of uh locking the benefit prior to Hang on, let me scroll down to new legis uh legislation. Should existing recipients be uh grandfathered from benefit haircuts? Uh I hate to say, but there’s no guarantee on any of that. So some people, yeah, they might say, I’m going to take it while the taken’s good. Uh you know, my dad uh was in that sim situation, health reasons that I’m going to take it to 62. I don’t know how long I’m going to be here. But in the case of I don’t know if social security is still going to be here, I’m going to take it while the taken’s good. Sure. Yes, some people are doing that. uh but be because they are taking it are they grandfathered from any reductions? No. Uh so there’s certainly that opportunity that if nothing is done by the year 2034 35 and beyond that could people currently on social security see a reduction they could. Uh we don’t know what’s going to happen but uh there’s no guarantee no uh no grandfathered in on that. Um
So, okay, I came in late. Uh, so unfortunately, someone that came in late, uh, so we do not have recording I mentioned at the beginning of the pres presentation. So, uh, please, I do have your information here. I hope uh, please say yes on this and I would love to have that one-on-one conversation with you uh, just to go over what you might have missed at the beginning. So, but unfortunately, yes, we were not able to record that. Uh, do most people spend their social security check or save it? I asked because I say uh I save it. I may earn more than 8% and um taking early. Any problems with uh that thought? So, no. I I actually do have people that uh might not need the income if they’re taking it and they’re saving it and growing their their money. Uh no, I I have seen that many times. So, some people will say that that’s part of the uh if you decide to take it a little early, but you’re not going to spend it. You’re just going to take it and bank it and grow that money. That’s certainly something to consider. uh many can’t afford to do that. But if you’re able to afford to um you know, you have other income or other assets and you don’t need that uh that income, but you decided to take it early, uh yeah, that’s a wonderful thing that if you can’t make that money grow and if you got it in the market or if you’re just getting interest rates on that, that’s certainly something that some people will do is that I decide that I decided to take it early, but I’m not spending it. I’m banking it and let it keep on growing. that does compound and uh save. That would be a good reason to take it early again if it fits in within your plan. So, yeah, great for uh for you that you’re able to save that. Uh let’s see. I know there was uh how far in advance can I apply for social security retirement benefits? Um up to four months before the date uh you want to start the benefit. So, yeah, typically around that uh two to three, you know, two two to 3 months. I mean, it used to now that everything’s online, it does move faster than when it was paper applications years ago and you had to do it, you know, many more months, but uh at least a couple of months before that you want to start applying for benefits. Um just so you’re geared up for when you want it to start. It’s there’s no delays in that. Um that you can certainly do that, but a couple of months in advance, you would want to start doing that. Uh how do I know the time is right to take social security? So again, when I do that retirement plan that uh figuring out what is the the right time, if you just say, “What if I took it at 65 or waited till age 67, which one is it wins?” It’s going to be very close. It’s not a huge huge huge long-term difference, but there is a little bit of a long-term difference where the longer you live, I’m going to say wait till 67 if you can. But uh when is the right time for you? That’s why I do the plan. I plug in 65, I plug in 67, and we look at the results of the plan. And uh maybe you decided to take it early and not spend it. Just like the last question, you wanted to bank that. Let’s plug that in and let’s see what uh what wins. Um you know, what balances you’ll have. And it takes taxes into account. It assumes that if you have higher income or lower income, it takes a lot of the tax situation in there, too. uh looking at the you know Roth IAS or traditional IRA withdrawals and conversions and the whole the whole thing uh that we can certainly do. So um figuring out when is the optimal the best time for you to do it? Let’s let the plan help us figure that out. Um how do I determine what the break even point is and that’s going to be between age 68 to 70. Uh, and the plan helps us figure I do actually have some other spreadsheets that I I’ve done for people of figuring if you take a lower paycheck at 62 or if you take a bigger paycheck at 67 by but you get five more years of that lower income that break even is going to be between uh 78 to 80 range is where that break even is. Uh let’s see if anything else came across. That was all the questions there. I’m at 702. Sorry I went 2 minutes over. Uh, but thank you all so much for your time and attention uh today. If you did say yes, I’m going to certainly be reaching out to you and scheduling a time to meet. Thank you all so much for your time and attention tonight. Have a great evening.